Netflix is aspiring to be on the level with some of the most talented companies in the business, like Pixar, in a bid to become the premium standard of content and excel in streaming technology. It has taken the streaming firm less than two decades to transform the way in which people watch TV and movies.
Hastings has big goals
“When you look at studios like Pixar, that combine great story telling and the great technological aspects, that’s where we want to be,” Netflix CEO Reed Hastings told MarketWatch.
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Before starting with Netflix, Hastings was an engineer and mathematician. His first project, Pure Software, helped users with troubleshoot software. The experience has surely helped Hastings launch a first-rate streaming-video technology, better than the rival services.
Richard Greenfield, an analyst at BTIG, believes, “Streaming video content at scale is no easy task. Having the technology to do so is a huge advantage.” Greenfield notes that when it comes to delivering streaming video, there is no match for Google and Netflix.
The idea of Netflix crossed Hastings’s mind in 1997 when he got agitated about having to pay a $40 late fee at a video store. Binge watching is a courtesy of Netflix, allowing viewers to watch a full TV series in a weekend. The online streaming firm has upturned the cable-TV business and compelled media companies to offer their own standalone services at affordable prices.
Challenges facing Netflix
To hit its goals, Netflix would need to make heavy investments to produce content and expand its services around the globe. The company’s revenue primarily depends on a $7.99 per month base fee. Profits decreased 63% in the most recently completed quarter and negative cash flow widened as the company spent more on content and expansion into foreign markets.
Netflix is strictly following its no advertisement policy, and its further reluctance on taking action on account sharing is raising questions about if the company can continue with the same model and achieve its goals. It must be noted that the streaming firm does not own all the original content it makes. Hastings is working to change the firm’s current method of obtaining original content to ensure the company owns all the rights. According to Hastings, the firm is gaining in its strategy of acquiring original content.
At around 2 p.m. Eastern, Netflix shares were up 2.04% at $113.85, and year to date, the stock is up by over 132%.